Cleveland, OH, October 19, 2006--Sherwin-Williams reported earnings in the third quarter that rose 18 percent, helped by strong sales to contractors painting houses.
For the quarter ended Sept. 30, net income grew to $179.1 million, or $1.30 a share, up from earnings of $151.6 million, or $1.07 a share a year ago. Sales increased 7 percent to $2.1 billion.
Analysts surveyed by Thomson Financial expected Sherwin-Williams to earn $1.27 per share on sales of $2.1 billion.
Through the last nine months, Sherwin-Williams earned $477.4 million, or $3.46 per share, on $6 billion in sales, compared with $388.1 million, or $2.73 per share, on $5.5 billion in sales, a year earlier.
Sales at paint stores during the quarter climbed 9.5 percent to $1.3 billion, and expanded 13 percent in the latest nine months to $3.7 billion.
The company said store sales were up mostly because of healthy domestic architectural paint sales to contractors in the first half of the year, as well as improved sales of industrial maintenance products.
Sherwin-Williams Chief Executive Christopher M. Connor said he was happy with the stores' performance, especially because do-it-yourself customer demand has weakened recently and the new-home market has slowed.
"We are also pleased with the Paint Store Group's increased productivity that has helped increase profitability while absorbing costs associated with opening 69 net new stores during the first nine months of the year, he said.
Connor said the company expected sales growth of between 5 percent and 7 percent in the fourth quarter -- implying sales of between $1.80 billion and $1.83 billion, and predicted earnings of 63 cents to 68 cents per share. Analyst have pegged the company to earn 69 cents per share in the quarter.
For the full year, Sherwin-Williams expects a per-share profit of between $4.10 and $4.15, including an estimated 8-cent stock options expense. Sales are expected to rise 8 percent to 9 percent over 2005 sales of $7.19 billion, which implies sales of $7.77 billion to $7.84 billion.
Wall Street analysts predict annual earnings of between $4 and $4.20 per share, including options expenses, on revenue of $7.84 billion.
Also Thursday, the company's board of directors named Paint Stores Group President John G. Morikis Sherwin-Williams' chief operating officer.
Morikis has overseen the group for the past seven years as it grew into the company's largest business with sales increasing from about $3 billion to $5 billion last year, Sherwin-Williams said in a statement.
